A question that often gets asked when the conversation moves to EC261 compensation (2019 No.278 now that we have left the EU) is what value the British Airways American Express companion voucher has in the case of downgraded or cancelled flights.
British Airways continues to insist that the companion voucher has no value, since it is simply a ‘plus one’ for an Avios booking.
Common sense suggests otherwise, and indeed we know that British Airways has lost numerous CEDR and MCOL arbitration cases with HfP readers over the years on this point.
For clarity, we do not know of ANY case where British Airways has actually won in court or arbitration on this issue. You may wonder why it continues to force readers to take this route to get the compensation they are legally due.
We were recently contacted by a reader who had just successfully won a dispute in Court. As the case had progressed to Court with BA unwilling to settle, there was no confidentiality undertaking signed. For once, we are free to discuss it.
Over to our reader:
“I was due to travel on a long-haul flight with my wife and infant. We had booked a reward flight in Club World using a Companion Voucher. We were downgraded without notice at the gate and had a second set of boarding passes issued with seats in World Traveller Plus. This was after a two hour delay waiting at the gate.
The BA staff tried to offer cash compensation of £200 each when we expressed our frustration. We rejected this and refused to travel on another day as we had another flight to catch at the destination. We were informed that BA would contact us within seven days of the flight to discuss the refund due, but no contact was made.
Over the next six months, 16 emails were exchanged between myself and British Airways’ customer relations team as I tried to seek the correct compensation.
I had calculated the correct compensation due under EC261 for downgrades. Based on my understanding that I was entitled to 75% of the price of the ticket and bearing in mind it was an Avios purchase, I was seeking:
Outbound leg was 90,000 avios (peak pricing)
75% of 90,000 = 67,500 Avios per adult
75% of 9,000 = 6,750 Avios per infant (infants pay 10%)
Total due: 141,750 Avios downgrade compensation
The total refund in Avios would be 141,750 for the three of us.
Unfortunately, British Airways rejected my calculation. As I wasn’t making progress, I decided I had no option but to take British Airways to court.
I wrote a detailed letter to BA before starting my action and subsequently issued a claim in the Small Claims Court using MCOL, the Money Claims Online Service. This was relatively straightforward and the online portal is quite user-friendly. You can do this yourself and do not need to appoint a lawyer.
At this point, British Airways offered me compensation I was legally due of 67,500 Avios for my ticket and 6,750 for our child.
However, it disputed my wife’s refund since it was a Companion Voucher, i.e. the companion ticket holder ‘did not pay a fare,’ and therefore not entitled to compensation. They were essentially arguing that the voucher had no value.
We argued that under Article 10.2(c) of EU Regulation 261, we were both entitled to compensation of 75% of the price of our tickets for the downgrade.
Article 10 of the Regulation relates to upgrading and downgrading. It states:
2. If an operating air carrier places a passenger in a class lower than that for which the ticket was purchased, it shall within seven days, by the means provided for in Article 7(3), reimburse:
(a) 30% of the price of the ticket for all flights of 1500 kilometres or less, or
(b) 50% of the price of the ticket for all intra-Community flights of more than 1500 kilometres, except flights between the European territory of the Member States and the French overseas departments, and for all other flights between 1500 and 3500 kilometres, or
(c) 75% of the price of the ticket for all flights not falling under (a) or (b), including flights between the European territory of the Member States and the French overseas departments
We also referred specifically to Article 3.3 of the Regulation which sets out very clearly that:
‘This Regulation shall not apply to passengers travelling free of charge or at a reduced fare not available directly or indirectly to the public. However, it shall apply to passengers having tickets issued under a frequent flyer programme or other commercial programme by an air carrier or tour operator.’
Clearly, EU261 applied to companion vouchers. Given that you can only get a companion voucher after a £10,000 credit card spend and the associated £195 fee for the card itself, we were adamant that British Airways was wrong in giving it a nil value.
It is worth noting that within BA’s court documents they referred to the “Steef Mennens v Emirates Direktion für Deutschland” case.
This was an attempt to demonstrate that a passenger who did not “pay a fare” was not entitled to any compensation. We asserted the facts of this case were completely different and could not be compared to our case, on the basis a Companion Voucher (with intrinsic value) was used to purchase a ticket. This view was accepted by the court.
We were successful at trial and were somewhat surprised that BA had not offered to settle prior to the hearing.
In addition to compensation for my wife’s downgraded ticket, we were also granted costs to cover the claim fee and hearing fee. The cash value of Avios was based on the cost of buying Avios directly from British Airways – so 1.6p per Avios.
We were therefore awarded £1,080 and 74,250 Avios, as well as our costs.
The judge agreed that it was acceptable for compensation on my ticket and my child’s ticket (but not my wife’s companion ticket) to be in Avios since this was the means of payment.
The £1,080 comes from multiplying 67,500 Avios x BA’s selling price of 1.6p per Avios.
[HfP edit: it is very rare for CEDR or MCOL to make a non-monetary award against British Airways. In every previous case we have seen, all of the compensation was paid in cash based on 1.6p per Avios]
It was crucial that we laid out the calculation to value the Companion Voucher, and therefore the compensation in monetary terms since we were using Money Claim Online.
My advice would be that you can most certainly pursue compensation for a downgrade on a companion voucher but it is imperative to set out your claim very clearly.
We put a lot of time and effort into researching the regulations, reading various terms and conditions and drafting the court documents. In the end it took 14 months from the date of the flight until the court hearing came around, but our perseverance and hard work paid off.”
How to earn Avios from UK credit cards (May 2021)
As a reminder, there are various ways of earning Avios from UK credit cards. Many cards also have generous sign-up bonuses.
There are two official British Airways American Express cards:
You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points, such as:
Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.
Do you have a small business? Until 20th May 2021, you can receive a special sign-up bonus worth 29,900 Avios with the Capital On Tap Business Rewards Visa credit card. This offer is exclusive to Head for Points readers. Click here to learn more.
(Want to earn more Avios? Click here to visit our home page for our latest articles on earning and spending your Avios points and click here to see how to earn more Avios this month from offers and promotions.)